According to a story published in the Spanish newspaper Cinco Dias on Monday, Santander (SAN.MC) of Spain intends to sell hazardous real estate assets with a nominal worth of up to 5 billion euros ($5.28 billion).
Subprime loans secured by real estate and other mortgages make up the asset portfolio known as Talos II, which the lender might eventually have to reclaim in the event of failure. Santander opted not to comment, and Cinco Dias omitted any information on the purchase price or markdown on the asset sale.
In the aftermath of the country’s real estate bubble bust at the end of 2007, Spanish banks were among the first to liquidate real estate holdings that had gone bad.
These days, lenders are carefully repackaging debts to salvage some revenue from loans that are certain to default after the epidemic and the economic downturn.
In August, non-performing loans at Spanish banks were still much below the peak of 13.6% in December 2013, at almost all-time lows of 3.56%.
The 5 billion euro sale of problematic assets by Santander is a calculated move that demonstrates their dedication to openness and sound financial management. This audacious approach will undoubtedly draw attention from investors and strengthen the bank’s future by creating a domino effect in the financial industry. Santander is in a strong position for long-term success because of its proactive attitude as the banking sector changes.
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